Selling a home is not always an easy undertaking, even if someone has been through the process before. Preparing the home, finding a buyer, and going through the closing process can sometimes leave a seller feeling unduly stressed.
This guide is meant to help homeowners who are in need of help with selling their home for cash. Taking the right steps in the process is essential and will help to prevent stress and aggravation. If you are planning on selling your home for cash, allow this information to guide you through each step you will need to take.
What Does It Mean When You Sell a Home for Cash?
Many people are confused when they read information on selling a home for cash. The confusion comes in when people realize it is against the law to sell a home for actual cash in the United States. You cannot simply hand someone the deed to your home after they hand you a stack of bills.
An all-cash offer means the buyer is not using any financing to pay for the home purchase. They simply transfer the funds to the seller or produce a cashier’s check for the full amount to close the deal. This type of sale is typically faster than a financed sale and there are some other benefits for both sellers and buyers.
What Are the Benefits?
The typical financed home sale takes around four to six weeks for closing. One of the biggest reasons closings fall through is because of financing problems. When someone purchases a home with cash, closing can typically be completed in around four days. A cash closing should rarely take any longer than twelve days to complete.
Buyers benefit when they purchase a home with cash because they own the home outright and will not have to worry about making payments and the hefty interest that can accrue over the life of the mortgage. To ensure a cash sale progresses with no obstacles, it is important to follow the steps outlined in this guide.
Important Steps for Selling a Home for Cash
Taking the right steps in selling a home for cash is crucial for preventing problems. We have outlined the steps in order, so they are easy to follow and will help you stay on track in the process. These steps will keep you as stress-free as possible and right on schedule as you sell your home.
1.Signing the contract
One of the first steps in selling a home for cash is signing the contract. Once you have accepted the buyer’s cash offer, you will complete a Purchase and Sale Agreement Contract. The process involved in this step is often referred to as “going under contract.”
2.Make sure the funds are verified
Accepting a cash offer is slightly risky because the buyer could not have the funds available. It is customary to ask for earnest payment upfront. This amount is typically around 1-2% of the cost of the home. It is imperative you verify the buyer has the funds in their bank account. Checking the buyer’s bank statements is crucial for protecting yourself in the sale. If a buyer cannot provide proof and an earnest payment, it is wise for you to look for another buyer for your home.
3.Hire a Title Company
Hiring a title company is required in most states. The title company’s job is to make sure the property lines are clearly drawn and understood and there are no liens on the property that would prevent the seller from going through with the transaction. Liens are placed against a property when the owner owes an unpaid debt, such as property taxes. All liens must be cleared before the home can be sold.
4.Hire an Escrow Company
The escrow company takes care of all of the closing documents. This company handles the transfer of funds for the sale of the home and all of the legal paperwork that is involved. Often, a homeowner will be able to hire a company that can handle both the title and escrow work.
5.Schedule the Home Inspection
When a buyer purchases a home for cash, it is not uncommon for them to place a contingency for inspection. The buyer pays for the inspection, but they have the right to request repairs or negotiate with the seller on the sale price if repair issues are found in the inspection.
6.Review and Sign All Closing Documents
Once all of the above steps have been carried out, you will need to be prepared for signing a mountain of paperwork. The following are just some of the documents that will need to be signed by the buyer in the closing process. Not all of these documents may apply to your particular cash sale.
- Closing Instructions
- HUD-1 Settlement Title
- Certificate of Title
- Title of Deed
- Loan Payoff Statement (This is needed if you still owe on the home.)
- Mechanics Liens
- Bill of Sale
- Statement of Closing Costs
- Statement of Information
Whether you use a real estate agent to sell your home or go through the process without professional help, the above steps will be needed. Working with a real estate agent will take away a lot of the stress in the process because they handle many of the above steps, so you do not have to yourself.
Selling a home for cash offers many benefits to both the buyer and seller. One of the biggest benefits is a faster and smoother transaction. Now that you know the steps involved in selling your home for a cash offer, you will be able to experience the level of confidence that is needed for the process. As with any home sale, make sure you protect your best interests and take time in the process, so you will not experience any undue stress when getting a cash offer on your home.